Life after debt...

[CherryBlossom321]

We have been debt free for 2 years now. Prior to this, we got into difficulty and owed £13,000 to several different creditors. It was paid back via a DMP over 4 years. We learned a lot during this process, including how to budget.

When we became debt free, we started to spend a little on our neglected house. It's been great to see gradual improvement.

The things is, I feel I've slipped back into some bad habits. We used to mainly have to buy basics food, so once we had a choice, it was exciting to finally buy, for example, Heinz ketchup again. Then more brands began finding their way back into our trolley. I'm not saying that this is wrong, but wondering how much I would potentially save if we went back to basics. I also treated myself more regularly. This has escalated I feel, and I've spent a small fortune on things like Lush, and L'occitane toiletries. Looked in the supermarket the other day at own-brand shampoo and wondered if it wasn't just as good? I still tend to only buy clothes in the sale, but at Next or M&S. I wonder if I would save more by buying George at Asda? Although I had a real problem with quality there a few years ago. I generally feel like I'm opting for the more expensive stuff, and not sure why, other than 'because I can'. I have a budget, but each month, we overspend in at least one category, meaning we don't save. DH equally has his issues, such as won't buy high street clothing.

There's still a way to go with our house, and I'd love to be overpaying the mortgage. We're not accruing debt, we still live within our means but now don't have savings. Does anyone else do this? Can anyone recommend good, cheaper food, toiletries or clothing? Any advice on how best to reign ourselves in and stop spending every penny? Thank you in advance.

My feeling is that it is OK to buy things you need and will use but having another solid goal to save money will define your needs. So to save £X in the next 12 months for example. Or you could be frugal for 2 months and spend on the 3rd month, you'll probably find the things you thought you needed in month 1, you no longer do. It's about prioritising needs. There can be joy in this, quite often the enjoyment of new shiny things is in the delayed gratification.

i think when it comes to toiletries its all down to personal choice. eg my mum buys tresemme in savers really cheap but splashes out on decent shower gel. however tresemme makes my oily hair much worse so i use herbal essences but i buy lidl's 33p shower gel. I think if you like a particular brand and it works for you stock up when its on offer, eg herbal essence is normally on offer in one of the supermarkets/boots/savers/superdrug so i never pay full price.

clothes - i think the key is to have a few good quality classic bits and then the seasonal/fashion/one season wears buy cheap in somewhere like primark/supermarkets. i tend to buy alot in charity shops and lookout for deals online. eg i wanted a new pair of vans so waited for a sale got a pair for £24.99 and then 8% cashback on top.

food - i dont buy many brands, tend to shop in lidl or aldi though so no opportunity too. but some branded bits you can get cheap in £ shops or discount stores so stock up when you are nearby if its something you use alot.

maybe aim to put some savings in one of those unopenable piggy banks first before you have your monthly budget so then theres no temptation to spend.

theres a really interesting programme thats on bbc iplayer at the moment called spend well for less where families have their branded things replaced with cheaper alternatives. its really interesting and an eye opener in some respects.

Thank you both, some really helpful pointers. All our friends are in similar circumstances to us but have less money coming in, and they manage fine on less. I actually get cross with myself. Who, I think you're onto something regarding delayed gratification. I think if I had a 'cool off' period I wouldn't buy half of it. Will check out that programme nocuts. I think a capsule wardrobe would work well for me, like you say, a few good quality, classic bits. I'll have a look at those on pinterest. I did this a few months ago and got blindsided by stuff in the shops. D'oh.

It's a difficult one. Years of tight budgeting can leave their effect eg with some items needing replaced - shoes, coats, underwear etc - and they can also result in an 'I achieved my goal and now I can relax and enjoy myself' approach. You might find that buying seemingly small things - expensive cosmetics and bath/body products for example - gives you that good buzz but Boy can those amounts add up. (Even though you're probably less likely to splurge without thought on large single items such as a car these days.)

Might it be possible to set and agree new goals for yourselves? (DH has to be on the same page on this one.) Maybe not quite as ambitious as the last one - and well done for managing that! - but something clear to work towards. It sounds to me as if you both would benefit from just a little extra pressure to enable you to manage better.

(And having even a little savings pot can make you feel so much more relaxed in general. No hearing a strange noise coming from the washing machine and Worry, Worry, Worry. )

Do you have a monthly budget spreadsheet or whatever? In mine, savings are in as monthly expenses and so come out as a dd on payday just like the mortgage and fuel bills do. So then what you have left over is completely discretionary money which is genuine treat yourself cash.

Good idea.

Thanks cozie. Yes, I think we need to talk about new goals. I think part of the problem is that sometimes, we've begun to build savings for something specific, then just as we almost reach it, we have to replace an appliance or pay a garage bill, and we become disheartened. It's so much easier to buy something in a shop and gain instant satisfaction (though obviously, that's short-lived).

Yes, yet, it's on a spreadsheet. I note down all essential, then necessary spends, and tell myself the 'surplus' will be paid into the savings account. I rarely actually transfer it. I've been dishonest with myself on that front, I've definitely thought at times "Oh, blow it, I really fancy this, I'll take it out of the surplus." It's a real struggle for me to control that impulse after years of having to say no everything bar the absolute essentials.

So we definitely need new goals and maybe I could start keeping a spending diary too. If I have to write it all down, I might think twice. I definitely have enough cosmetics and toiletries to keep me going a while.

Maybe you need to go just that little bit further then and actually set up a direct debit to a separate fund. Nothing excessive - an amount that you can both agree on - but something that comes out automatically and can almost be forgotten about. It's easily done.

Oh - and imagine what a state you'd be in if you had to replace something/pay a garage bill and you had absolutely no cushion. You did so well to clear that debt.

Set up an standing order or a dd then you can't just not transfer it. You need to change your mindset and stop seeing saving as discretionary and see it as essential. Assuming of course that you can afford to and you don't need to spend it on essentials

Sorry - I meant to say Standing Order of course. (Not Direct Debit.)

Regarding clothing - target is to buy none unless you need it. That means replacing underwear and shoes, work wear and nothing else. Try to get out of the mindset of shopping as recreation , it isn't. You've made a huge achievement in clearing that debt , so next target is savings.

Well done on becoming debt free! We are debt free and we are overpaying our mortgage now to reduce the term. Its shocking how much you can save on interest by overpaying. Its worth looking at the mortgage overpayment calculator on Money Saving Expert to see how it might effect you :)

Aldi is fab for food. I find with clothes good fitting quality jeans and shoes are worth it, but I dont mind supermarket brands for anything else. Supermaket ranges are better than they used to be I think!

We budget the surplus money too, and have saving accounts for each additional 'thing', for example decide an amount for our car (tax, mot, insurance, repairs, and a bit extra towards a replacement), and set up a standing order for that amount into a seperate savings account. Then when the tax or insurance come around I can pay the full balance upfront (saving some cash), and if ever we get a big repair needed it doesnt affect our monthly cashflow.

We have savings accounts for birthdays & christmas, the car, holidays, emergancys (replacing appliances), household (decorating/improvements/furniture) and clothing, and set up a standing order to each account.

We used to spend a fortune on groceries/toiliterys/cleaning, it has always been our biggest outgoing. We budget a amount we are happy to spend, then transfer that amount to a seperate current account and we pay for anything it those categorys with that account which helps us keep track of our spending.

For us, its not about 'going without', its about finding a balance, I found that having our mini savings accounts help me exactly where our money was going, and helped me reign in and find a good balance

Good Luck!

Just to add my 2 cents - I find supermarket own brand shampoo just the same as other shampoos. L'Oréal moisturisers are great and are always a 3rd off in superdrug. I'm not in debt but just decided to spend less money on toiletries and cosmetics because I was starting to feel that the amount I was spending on cosmetics eyc was obscene. I do think it's important to splash out on good haircut every so often though.

Oh definitely transfer the savings at the beginning of the month, rather than what's 'over' at the end.

Imagine it's a bill like anything else.

Great, thanks everyone, some great ideas. I'm going to go cold turkey on clothing until something is genuinely needed. Also going to try the own brand toiletries. The one thing I can't compromise on is Clinique redness solutions skin care. It's the only thing after years of searching that controls my rosacea. Also need to speak to DH about the extras that sneak into the basket every time he pops to the supermarket. I'd go myself but I don't drive. We each have a personal spending amount in the budget and I might tell him that extra 'treats' have to come out of that. Obviously the same rule would apply to me.

Many years ago, Cherry, I took out a small endowment insurance policy which happens to mature this year. It's just been sitting there chugging away in a lowish profile/lowish money sort of way but come Autumn, it will mature and give me enough to fund a much-needed new heating and water boiler with probably a little bit over for a treat if I wish it.

Note - I'm not necessarily recommending such a policy, just that it's been a smallish amount of money coming automatically out of my account every month and although I took it out in a time of great penury, I almost forgot about the Direct Debit - which this one was. Those small amounts can add up over time so I would really recommend, in your situation, that you actually arrange for at least a little amount of money to automatically go somewhere relatively safe every month eg by Standing Order. It doesn't need to be large, just enough to get you in the habit. Could you afford to set aside £20 a month for example?

You've done so well.

Yes, I think £20 is a great idea. Previously we've aimed much higher (£100-£200) and just end up taking it back out by the following month.

Maybe give that a try then? It would be a good start. (Best to make it an automatic withdrawal in some way, though.)

Best of luck.

Have you tried looking into YNAB? www.youneedabudget.com/
You can get a 34 day free trial and see how you like it. In the last 9 months, I've paid off my overdraft and started saving almost 40% of my wage for a house deposit x)

each to their own - but if you can work a spreadsheet I don't think you need to pay for budgeting software.

and if you can work an i-phone or tablet without swearing (I can't!) you are easily smart enough to use a spreadsheet.

back to other saving tips; make every penny of your money work with the interest bearing current accounts, if credit rating allows you to open them. Set up two and shift money back and forth to meet minimum pay ins.

toiletries; also go cold turkey and buy when you run out. If there is one cream that works for you, that's fine, but otherwise you've probably got years of supplies.

ditto cleaning materials; all that is needed are washing up liquid, washing liquid/powder (not fabric conditioner which is unnecessary, not liquitabs or other expensive stuff), dishwasher tabs/rinse aid/salt (30 tabs plus the others total under a fiver from Wilkinson), surface cleaner (Cif lookalikes), anti-bac spray for when someone has an illness, polish if you have wooden surfaces, a bottle of white vinegar and a pack of soda crystals. Big pack of scourers/washups from poundland, job done. You need nothing else apart from hot water and a vacuum cleaner to keep a home clean and hygienic.

My instinct is that you need to work hard towards a small financial cushion to build from. If you only have a few pounds, there's such a temptation to think 'Oh hang it, that's not worth preserving' and to spend it on something you might not really need. You managed to get out of debt before - which is marvellous - so you've learned some basic skills. Maybe you just relaxed a bit too quickly for you?